The Jordan School District Split

The Jordan School District (covers most of the southern part of Salt Lake County including Daybreak) will split into two districts on July 1, 2009. The whole affair resembles a long and tedious divorce process which divided up assets and kids. Only in this divorce, 1 billion dollars in assets, hundreds of millions in liabilities, and just over 81,000 students were divided between what will be the Canyons School District and the new Jordan School District.

While this possibility had been in the minds of many people for years, the issue was voted on in the 2007 election in which the Eastern half of the district voted to secede. Many people in the Western half of the district felt that this was unfair as it greatly affected them and their children, yet they did not get to vote on the matter. The voters in the Eastern half of the district wanted to secede because they felt like they were subsidizing the construction of West-side schools when the schools in their own neighborhood were old and in need of repair. In many ways this conflict seemed to follow the classic East vs West theme.

The question then became: how do we split up the assets and liabilities. This was the major sticking point between the East and West side transition teams. When reading news articles about this issue I could not help but think that people were only thinking about money and not about the students. First and foremost was the question of how to value assets. Do you assign a monetary value based on the market? Do you just assets according to geography? Both sides had experts give opinions that weighed heavily in their favor with a biased view of the assets. For example, the West side transition team assessed the following values:

• West side schools value: $518,483,767.00
• East side schools value: $574,639,271.00

While the East side transition team assessed the following values:

• West side schools value: $778,364,746.00
• East side schools value: $399,218,522.00

Quite a large discrepancy if you ask me. The arbitrators agreed and felt that both assessments were not reliable. Instead they considered qualitative aspects in that the East side has a larger tax base and the West side has and will have a rapidly growing student population. To that end, to put both districts in a viable financial position they found the following:

• Liabilities will be divided up 58% for the East side and 42% for the West side (This according to the state legislature)
  
• Schools will be divided up on a geographic basis
• Other assets will be divided up according to student population (59% West side and 41% East side)

The specifics are still left up to the transition teams, but now they have binding rules that they must follow. In the end, I think that this decision brings about the best possible scenario for both school districts to prosper and for students to continue to receive the same quality of eduction that they have been receiving. The best part of this split is that now the decisions for the school district are more localized. However, this could very well mean an increase in taxes for both the West and East sides.